function eq = setup_transition_matrices(eq, param,glob,options)
    
    lp          = eq.l;
    fspaceerg   = fundef({'spli',glob.bgridf,0,1});

    lp          = min(lp, glob.maxb);
    lp          = max(lp, glob.minb);
    
    Qb          = funbas(fspaceerg, lp);

    eq.Q           = dprod(glob.Qef,Qb);

    % Distribution of incumbent firms
    L                  = ones(size(eq.Q,1),1);
    eq.L               = L/sum(L);    

end